Private equity firms may be approaching a turning point in the long-running slowdown in asset sales, as mounting debt maturities and investor demands for liquidity increase pressure on fund managers to complete transactions.
That was the outlook offered by Brian Schwartz, CEO of H.I.G. Capital, during an October 21, 2026, appearance on Bloomberg Deals. Speaking with Bloomberg's Dani Burger, Schwartz discussed the challenges facing middle-market private equity firms, the growing backlog of portfolio companies awaiting exits, and the forces that could eventually accelerate dealmaking.
Schwartz also highlighted H.I.G. Capital's recent transaction activity, reporting approximately $6 billion returned to investors through 15 exits over the preceding 12 months.
The comments come as private equity managers confront a market in which elevated financing costs and valuation differences have complicated the process of selling portfolio businesses. Although transaction activity has continued, Schwartz suggested that structural pressures could eventually create stronger incentives for sellers to act.
Brian Schwartz Identifies Two Drivers of Private Equity Exits
During the interview, Schwartz pointed to two principal factors that could bring more private equity-backed businesses to market: approaching debt maturities and limited partners' increasing desire to receive distributions.
"We've been waiting so-called for the dam to break," Schwartz told Bloomberg.
He suggested that the approaching wave of debt maturities could force some sponsors to reconsider their ownership positions, particularly when otherwise viable businesses carry balance sheets that have become difficult to refinance.
In those situations, financial sponsors may face a choice between contributing additional equity to support refinancing and relinquishing control to lenders. Either outcome could increase restructuring or transaction activity, creating opportunities for investors positioned to navigate complex situations.
The second factor involves the growing importance of distributions to limited partners.
Schwartz referred to a backlog of approximately 33,000 private equity-owned companies. Separately, published reporting citing PitchBook put the global inventory at 33,575 companies as of June 30, 2026; that figure covers private equity more broadly, rather than just middle-market firms. Schwartz also estimated that average holding periods across the industry had extended to roughly seven years.
The backlog illustrates the accumulation of unrealized investments within private equity portfolios.
As assets remain unsold for longer periods, investors may become increasingly focused on distributions to paid-in capital, commonly known as DPI, rather than relying exclusively on reported investment returns.
"The second more practical piece is investors want their money back," Schwartz said.
The distinction matters because unrealized investment gains cannot be redeployed or returned to investors until managers generate liquidity through exits, refinancings, or other distributions.
H.I.G. Capital Reports $6 Billion Returned Through 15 Exits
While acknowledging the broader industry's difficulties, Schwartz described H.I.G. Capital's experience as comparatively favorable.
H.I.G. reports approximately $75 billion of capital under management, based on total capital commitments managed by the firm and its affiliates. Its strategies include private equity, credit, and real assets. Schwartz described an investment approach centered on identifying complex opportunities and pursuing operational improvements.
Schwartz explained that H.I.G. frequently targets businesses whose acquisition prices reflect operational challenges or other complexities. Its investment teams then work with portfolio company management and operating partners to improve performance.
According to Schwartz, that approach is intended to generate value from business fundamentals rather than depending primarily on changes in market valuations.
Schwartz reported an average holding period of approximately 5.3 years for H.I.G.'s investments, somewhat longer than the firm's historical experience but below the broader industry estimate he cited.
"We've exited 15 deals and returned about $6 billion in the last 12 months," he told Bloomberg.
The distributions reported by Schwartz highlight the importance of liquidity to institutional investors. The amount returned does not, by itself, establish investment profit or performance relative to other funds.
Middle-Market Deal Activity Could Create New Opportunities
An eventual increase in private equity exits would have implications beyond funds seeking to sell existing investments.
Businesses facing refinancing pressures may attract buyers with the capital, industry experience, and operational resources needed to support a transition. Sponsors seeking liquidity could also become more willing to negotiate valuations that reflect current borrowing costs and market conditions.
For middle-market investors, these dynamics may create opportunities to acquire fundamentally sound companies that have been constrained by capital structures rather than underlying business performance. However, refinancing pressure can also lead to lower sale valuations, losses for existing investors, or transfers of control to lenders.
Schwartz's assessment reflects a market in which the timing of recovery remains uncertain, even as the incentives for transactions continue to build.
H.I.G. Capital's reported exit activity illustrates the liquidity Schwartz said the firm had generated despite those conditions. His comments also highlighted the firm's focus on operational improvements and complex transactions as more sponsors confront financing and holding-period constraints.
Rather than predicting an immediate surge in dealmaking, Schwartz's Bloomberg interview outlined the pressures that could gradually move private equity markets toward higher transaction volumes.
For an industry seeking to convert years of accumulated portfolio value into investor distributions, those pressures may become increasingly difficult to ignore.
